Now go to the fourth tab, "Authentication," click the "Import Key File" button, navigate to the location where you've just saved the key file (usually, it is File System/home/YOURUSERNAME/Desktop) and double click it. You will immediately see a new entry called "A1F196A8 2009-01-20 Launchpad PPA for Pidgin Developers".

Click the “Close” button, then the “Reload” one and wait for the application to close!

Go to System -> Administration -> Update Managerand update Pidgin to the new version!

Close Pidgin if it was running during the update process and open it again. Yahoo should connect immediately now. And the best part is that your Ubuntu machine will always be updated with the latest versions of the Pidgin messenger, from now on!